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Civil Litigation Dicta - Costs - Where Orders Premature. Baig v. Thunder Bay Vacant Land Condominium Corporation No. 39
In Baig v. Thunder Bay Vacant Land Condominium Corporation No. 39 (Ont CA, 2026) the Ontario Court of Appeal partially allowed an appeal, this where "the application judge failed to determine the appellant’s oppression claims".
Here the court allowed a costs appeal where the trial judge decided costs without bills of cost yet being filed:The Application Judge’s Costs Order Reflects Error and Must Be Corrected
[61] Ms. Baig submits that the application judge erred in making a costs award before receiving any bills of costs or submissions. Ms. Baig points out that r. 57.01(5) of the Rules of Civil Procedure only requires that bills of costs be served after the hearing of an application and she argues that she was therefore entitled to serve and file a bill of costs after release of the application judge’s reasons. She argues that, in the absence of bills of costs and submissions, the application judge could not evaluate many of the factors relevant to a costs award under r. 57.01(1) and that his failure to hear from the parties on this issue constituted a breach of procedural fairness, relying on Afolabi v. Law Society of Ontario, 2025 ONCA 257, 510 D.L.R. (4th) 424, at paras. 109-111, leave to appeal refused, [2025] S.C.C.A. No. 203.
[62] Ms. Baig asserts that she should have been awarded a greater amount in costs against Benson and Deschamps. She also seeks costs of the application against the Corporation if she is successful against it in the appeal.
[63] Finally, Ms. Baig contends that she was denied the opportunity to include in her costs submissions a request for an order exempting her from paying her share of the Corporation’s legal expenses in relation to the proceedings in this court and in the court below.
[64] The respondents submit that, although bills of costs and submissions may be helpful, they are not required. The rules direct judges to “devise and adopt the simplest, least expensive and most expeditious process for fixing costs”: r. 57.01(7). And that is what the application judge did here. Bills of costs and submissions would not have altered the application judge’s ability to fix a fair and reasonable amount for costs and his decision not to receive them does not justify interfering with his discretion.
[65] An appellate court may set aside a costs award only if the judge made an error in principle or if the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2005] 1 S.C.R. 303, at para. 27.
[66] I agree with Ms. Baig that there was a reversible error in the application judge’s costs award. The requirement that the court “devise and adopt the simplest, least expensive and most expeditious process for fixing costs” under r. 57.01(7) does not justify the denial of procedural fairness. Indeed, that rule continues, “without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties”. Parties are entitled to put their positions respecting costs to the court for proper consideration: they have a right to be “heard”, even if the hearing is through written submissions.
[67] The Rules of Civil Procedure anticipate that parties will have the opportunity to be heard on costs. It was wrong for the application judge, after noting that bills of costs had not been filed, to determine costs without affording the parties an opportunity to file bills of costs and to make submissions. Rule 57.01(5) provides that “[a]fter a trial, the hearing of a motion that disposes of a proceeding or the hearing of an application, a party who is awarded costs shall serve a bill of costs (Form 57A) on the other parties and shall file it, with proof of service.” In other words, it is anticipated that the parties will have the opportunity, after a trial, application or motion that disposes of a proceeding, to provide bills of costs. For a judge to proceed in the absence of bills of costs is to invite speculation about the legal services provided and disbursements incurred in the course of what may have been a lengthy proceeding, based only on the parties’ attendance at the dispositive hearing.
[68] In this case, the hearing was adjourned without receiving the parties’ bills of costs, costs outlines, or submissions on costs. It was reasonable for the parties to assume that they would have the opportunity to address costs once the application had been determined. This was a relatively complicated matter that had been litigated for several months. The application judge should not have determined costs without seeking submissions from the parties. This was a denial of procedural fairness: Afolabi, at para. 111.
[69] Ms. Baig submits that if this court agrees that the application judge erred in determining costs without hearing from the parties, the parties should have the opportunity to come to an agreement on costs of the application, including whether she should be exempt from contributing to all or part of the Corporation’s legal expenses in connection with this matter,[2] and that in the absence of an agreement, this court should determine costs on the basis of written submissions. I agree.
[70] I would allow the costs appeal and direct that, if the parties are unable to reach an agreement with respect to costs of the application, as well as any request by Ms. Baig that she be exempted from payment of all or part of the Corporation’s legal expenses in relation to this matter, they provide, within 20 days, their bills of costs and written submissions limited to three pages each, so that this court may fix the costs in the court below and determine Ms. Baig’s exemption request. . 1417217 Ontario Inc. v. River Trail Estates Inc.
In 1417217 Ontario Inc. v. River Trail Estates Inc. (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal from a ruling involving oral real estate joint venture and several related issues.
Here the court holds that a trial judge's cost assessment was premature, where an ordered accounting had not yet been completed and offers to settle could not yet be properly considered:ISSUE 5 - The Interest and Costs Judgment must be set aside
[54] The trial judge ordered that an Associate Judge conduct an accounting to determine the final state of 141’s accounts, including any amounts that might be payable to Mr. Suleman or the Estate, and any amounts that each might owe to 141. Because it is unknown what monies, if any, one or more of the parties may owe 141, the trial judge erred in ordering the immediate payment of the Net Sale Proceeds by the Estate, and other of the Appellants, to 141. The unfairness of such an order is clear: since 141 has significant tax liabilities and no assets, if the order is complied with and the accounting proves the Estate’s set-off claims, there is no realistic possibility that any monies now paid will be recoverable.
[55] For similar reasons, the trial judge erred in making an order as to costs of the action at this time in the proceeding. The result in the proceeding and any offers to settle are the foundation for a trial judge’s exercise of discretion in awarding costs: r. 57.01 of the Rules. Until the accounting is completed, the results of the claim and counterclaim are unknown and offers to settle cannot be properly considered. Further, the trial judge could not decide the scale of costs because the parties’ conduct could not be fairly assessed absent the results of the accounting.
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